CB Richard Ellis to Acquire Insignia Financial in $400M-Plus Deal

GlobeSt.com has confirmed that CB Richard Ellis has agreed to buy Insignia Financial Group in a $400-million deal that would create what is being touted as the world’s biggest real estate brokerage firm. The formal announcement is expected to be made in New York this week.

Insignia´s share price rose $1.35 to $9.72 late Friday after Globest.com´s sources close to the negotiations in London confirmed that the deal had been made, under which CB Richard Ellis will take over Insignia. CBRE currently has around 10,000 employees in more than 250 offices across 47 countries and Insignia has more than 6,200 people in 95 offices across the world. By comparison, Cushman & Wakefield has more than 11,000 staff in 154 offices and Jones Lang LaSalle employs 7,200 staff in more than 100 markets. Insignia is a New York Stock Exchange-listed company with total revenues in excess of $735 million.

The source said Insignia´s management had been on the verge of taking the company private through a management buyout in a move that would allow founder Andrew Farkas to concentrate on his private investment interests. But CBRE stepped in with a bid significantly in excess of the Insignia share price at the time.

In Europe, Insignia´s top management looks set to survive the expected cull. Insignia’s Mike Strong and Alan Froggett are tipped to take the two top jobs.

The deal also sees the reunification of the Richard Ellis brand. Insignia retained the rights to the name in the UK, and continued to trade as Insignia Richard Ellis, while CBRE--which owned the rights to the name everywhere else in the world--operated there as CB Hillier Parker.

The agreement puts an end to months of speculation and rumors that a deal between the two firms had been set.

A statement issued by Insignia confirmed the merger discussions but cautioned that the deal is far from done. 'There is no assurance that the current discussions will result in a transaction,' Insignia´s statement said. 'If and when the parties enter into definitive documentation that resolves all critical aspects of a transaction, including risk allocation and financing, the Company will make a public announcement. Insignia and CBRE have, in the past, engaged in discussions about similar combinations, none of which have come to fruition.' CBRE managing director Victor Dominguez refused to discuss the matter. 'We don´t have any comment,' Dominguez told GlobeSt.com. 'We don´t comment on any market rumor.' Insignia officials in New York would not comment.

(source: GlobeSt.com)

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